How Obamacare is compromising state university student health insurance plans

Helena College non-traditional student Susan Wensel gets her health insurance through her husband's job. Only about 220 of the institution's 1800 students opt for the insurance plan offered by the school.

Credit Dan Boyce

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Officials with the Montana University System said this week the Affordable Care Act is creating problems for the health insurance plan offered to students at the state’s public universities.

Those students need to have some kind of health insurance. For years, the university plan has offered a reasonably priced alternative for students not on their parents’ plan.

But that may be in jeopardy.

The Affordable Care Act allows students under the age of 26 to stay on their parents’ plan. That’s led to a lot of younger students leaving the university’s insurance. The total number has dropped almost 15 percent in the last year and a half. Meanwhile, the great recession has been causing more older Montanans to go back to school for new job training. So more of those who are joining the plan are older, less healthy individuals who cost more than they pay in.

University System Benefits Director Connie Welsh said the plan has been losing money for the first time.

“We weren’t able to pay even claims let alone administrative costs,” she said.

The university system is now looking at its options for student health insurance. It could start completely running its own insurance plan—stop contracting with a third-party like Blue Cross Blue Shield. That could save money, but it’s a big risk. The university system could decide not to even offer a plan, directing students to the Obamacare Marketplace. Welsh said the option they most prefer is to keep the plan with Blue Cross and tweak it to stop losing money. To do that, some costs will have to go up even more than they have been.

“As far as premiums, I think in overall, yes, the plan premium will have to go up,” she said.

Welsh said the commissioner of Higher Education will be making decisions on what option is the best value for students around February of next year.